The economic recovery that appeared just in time to boost President Bush’s re-election prospects will grow stronger in the months to come, economists said this weekend.
Housing construction, home ownership, manufacturing, consumer spending and retail sales are all up substantially, encouraging business economists to raise their economic growth forecasts from 4 percent to 5 percent and to predict that the spurt in job creation will continue for the rest of this year.
“Usually in a recovery, you jump to the higher levels of job creation and stay there, and that is what’s going to happen,” said American Enterprise Institute economist Kevin Hassett, who predicted March’s 300,000-plus increase in new jobs.
Supply-side economist Arthur Laffer said, “The jobs numbers are right on track. By election time, the economy should be doing a lot better. I’m not worried about Bush’s re-election.”
If the economy and the number of new jobs continues to grow at the same levels seen in the last few months, campaign strategists say it will undermine Democratic presidential candidate Sen. John Kerry’s top campaign issue and his party’s hopes of riding to a political comeback on a wave of economic discontent.
Most Democratic state party officials say that the nearly 3 million jobs lost in the past three years have not been recovered and that recent employment gains have largely been in the service sector, not in the higher paying industrial sector. But some Democrats, when pressed to describe their state’s economy, admit that things have gotten better in recent months.
“Missouri’s economy has actually improved,” said Democratic state Chairman Joe Carmichael. “The number of jobs created last month was a good number, the greatest number for any month in the past 20 years. Things seem to be turning around.”
Mr. Bush carried Missouri in 2000, and many campaign strategists put the state in his column this year. Missouri’s 5 percent jobless rate is below the 5.7 percent national average.
Chicago economist Brian Wesbury, who maintains close ties with the Bush administration, thinks the latest job growth numbers are underestimated and will be even larger in the months to come.
“I’ve always believed that come November the economy will not be an issue that hurts George Bush; it will help him. The economy is gaining strength and will be even stronger by the time the election rolls around. It’s getting there that’s the tough part,” Mr. Wesbury said.
Even so, the emerging recovery does not seem to have improved Mr. Bush’s job-approval polls on his handling of the economy. Last month, 55 percent disapproved of his stewardship of the economy and only 42 percent approved, the Gallup Poll reported March 30.
But recent polling data reflecting March’s big spurt in new jobs suggests that voter perceptions about the U.S. economy have begun turning in Mr. Bush’s favor.
The National Annenberg Election Survey reported Friday that the “percentage of people saying the Bush administration’s policies made the economy worse dropped from 41 percent in late March to 36 percent in April. The share saying they had made the economy better rose from 26 percent to 30 percent.”
A poll conducted for the Associated Press earlier this month to gauge people’s biggest concerns found a precipitous drop among those who mentioned the economy as their chief worry — falling from 31 percent last July to 18 percent now.